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Tuesday, February 01, 2011

Sen. Bingaman Outlines Energy Priorities For The 112th Congress

Jan 31: In a major speech to the affiliated Washington, DC progress think tanks, NDN and the New Policy Institute, Senate Energy & Natural Resources Committee Chairman Senator Jeff Bingaman (D-NM) outlined what he envisions to be the "Energy Priorities for the 112th Congress."

He said, "At the beginning of this new Congress, it is already becoming clear that energy policy will have a major place on this Congress's agenda."Part of that is because the President made clear last week in his State of the Union Speech he will give energy a major priority in his administration. In part, it is because our energy security is dependent on overseas supplies and global stability. The events that we have seen unfold in North Africa and the Middle East are stark reminders that the world is an unpredictable place. Whenever geopolitical events potentially affect our access to affordable energy supplies, it is a spur to consider energy policies that might reduce those geopolitical risks.

"But perhaps more important than any of those reasons is the competitive pressure we are experiencing from other major world economic powers, as they take a very leading role in clean energy markets. According to Bloomberg New Energy Finance, new investment in clean energy globally reached nearly a quarter of a trillion dollars in 2010. That was a 30 percent jump from where it was in 2009, and a 100 percent increase from the level in 2006. China alone invested $51.1 billion in clean energy in 2010, making it the world's largest investor in this sector. China now manufactures over half of the photovoltaic modules used globally. In 2010, China installed about 17 gigawatts of new wind capacity, roughly half of the total capacity installed globally, with virtually all the equipment being supplied by its domestic manufacturers.

"But the concern about the competition for clean energy jobs is not just about China. Europe also made major strides last year towards competing in these markets. Countries like Germany, the Czech Republic, Italy, and the United Kingdom, have emphasized small-scale distributed electricity generation projects. In Germany, 8.5 gigawatts of new photovoltaic capacity were added in 2010. So there is a lot going on around the world in that subject. We also see that other countries consume energy more efficiently than we do. According to the International Energy Agency (or IEA), Japan, the United Kingdom, and Canada are all ahead of the United States in implementing policies to make sure they get the most out of every BTU that they consume. Japan has its 'Top Runner' program, which encourages competition among appliance and equipment manufacturers to continuously improve the efficiency of those appliances and that equipment.

"So the question is, how do we respond to this competitive world for the clean energy jobs? I believe that to remain at or near the forefront of this strongly developing market, we need to do at least four things:

First, we need to ensure that we remain at the forefront of energy research and development, since innovation is the source of our greatest competitive strength. The President made that point in his State of the Union Speech and in other forums, as well.

Second, we must ensure that we have a strong domestic market for clean energy technologies. Without clean energy market-pull in the United States, there will not be the incentive to manufacture and deploy these technologies here.

Third, we have to ensure that we have the necessary financial infrastructure and the incentives to provide the capital needed to build advanced energy technology projects.

And finally, we need to have explicit policies to promote the development of U.S. manufacturing capabilities for these clean energy technologies.

"I think these four items or elements should be at the heart of whatever comprehensive energy legislation that we undertake in this Congress. Let me say a few more words about each of them. . . So these are four key strategic elements that need to be included in any energy legislation in this Congress, if an energy bill is to help us compete in global energy markets in the future. None of these individual ideas are new, but their interconnection is now more apparent. A few years ago, we thought that we could do just one or a few of these things and be successful. It is now clear that you must do all four of them and do so on a level that is competitive with what other countries are doing.. ."

Senator Bingaman then outlined specific policy initiatives that he said "will be very timely for us to pursue in the Senate this year." He said he anticipates a lot of meetings and bipartisan dialogue over the next few weeks as the Senate Energy & Natural Resources Committee works out a legislative roadmap for this Congress.

The policy initiatives that he mentioned included: (1) energy efficiency including appliances, residential and commercial buildings , manufacturing and industrial operations; (2) moving to a cleaner energy mix in the way electricity is generated, i.e. a Renewable Electricity Standard; (3) financing assistance for energy projects including reforming the current loan guarantee program, providing financing support for advanced energy manufacturing in this country, and providing reasonable stability and predictability in the tax provisions that apply to clean energy projects and technologies; (4) proper and effective regulation of energy development to order to protect the public health and safety and the environment (i.e. oil and gas drilling regulations); and, (5) the vulnerability of our electrical grid to cyber attack.